Value chain GHG emissions (Scope 3 emissions)

Shipping

Image caption: M/V Green Future, fuelled by lower GHG emissions bio-methanol, shipping copper concentrates from our mines in Chile.  

Our ambition

Notes and definitions  

  1. The baseline year, reference year and performance data of our GHG emissions, targets and goals will be adjusted for any material acquisitions and divestments, and to reflect progressive refinement of GHG emissions reporting methodologies.  
  2. Our value chain GHG emissions targets and goals are referrable to a FY2020 reference year, except that our medium-term goal for shipping is referrable to a CY2008 baseline, which was selected to align with the base year for the International Maritime Organisation’s CY2030 emission intensity goal and its corresponding reasoning and strategy. The boundary of each target and goal may, in some cases, differ from required reporting boundaries. The use of carbon credits will be governed by BHP’s approach to offsetting, available at bhp.com/climate
  3. Our ability to achieve the target is subject to the widespread availability of carbon neutral solutions to meet our requirements, including low to zero GHG emission technologies, fuels, goods and services.  
  4. Operational GHG emissions of our direct suppliers means the Scope 1 and 2 emissions of our direct suppliers included in BHP’s Scope 3 reporting categories of: Category 1, Purchased goods and services (including capital goods); Category 3, Fuel- and energy-related activities, Category 6, Business travel; and Category 7, Employee commuting.  
  • Baseline/baseline year (in relation to GHG emissions targets and goals): A year used as a basis to compare and measure performance of future years.  
  • Carbon credit: The reduction or removal of carbon dioxide, or the equivalent amount of a different GHG, using a process that measures, tracks and captures GHGs to compensate for an entity’s GHG emissions emitted elsewhere. Credits may be generated through projects in which GHG emissions are avoided, reduced or removed from the atmosphere or permanently stored (sequestration). Carbon credits are generally created and independently verified in accordance with either a voluntary program or under a regulatory program. The purchaser of a carbon credit can ‘retire’ or ‘surrender’ it to claim the underlying reduction towards their own GHG emissions reduction targets or goals or to meet legal obligations, which is also referred to as carbon offsetting or offsetting. We define regulatory carbon credits to mean carbon credits used to offset GHG emissions for regulatory compliance in our operational locations (such as the Safeguard Mechanism in Australia). We define voluntary carbon credits to mean carbon credits generated through projects that reduce or remove GHG emissions outside the scope of regulatory compliance (including Australian Carbon Credit Units not used for regulatory compliance).  
  • Carbon neutral: Making or resulting in no net release of GHG emissions into the atmosphere, including as a result of offsetting. Carbon neutral includes all those GHG emissions as defined for BHP reporting purposes.  
  • Goal (for BHP with respect to GHG emissions): An ambition to seek an outcome for which there is no current pathway(s), but for which efforts are being or will be pursued towards addressing that challenge, subject to certain assumptions or conditions. Such efforts may include the resolution of existing potential or emerging pathways.  
  • Greenhouse gas (GHG): For BHP reporting purposes, these are the aggregate anthropogenic carbon dioxide equivalent emissions of carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs) and sulphur hexafluoride (SF6). Nitrogen trifluoride (NF3) GHG emissions are currently not relevant for BHP reporting purposes. 
  • Low to zero GHG emission(s) (for shipping): Capable of between 81 per cent to 100 per cent lower GHG emissions intensity (gCO2 -e/joule) on a well-to-wake basis compared to conventional fossil fuels used in shipping.  
  • Low to zero GHG emission(s) (for energy products other than shipping fuels): Capable of between 90 per cent to 100 per cent lower GHG emissions intensity during generation and/or combustion (as applicable) compared to conventional fossil fuel generation and/or combustion.  
  • Net zero (for a BHP GHG emissions target, goal or pathway, or similar): Includes the use of carbon credits as governed by our approach to carbon offsetting, available at bhp.com/climate 
  • Offsetting (in relation to GHG emissions): The use of carbon credits. Refer to the definition of carbon credit.
  • Reference year (for a BHP GHG emissions target or goal): A year used to track progress towards GHG emissions targets and goals. It is not a baseline for GHG emissions targets and goals.  
  • Scope 1 (GHG emissions): Scope 1 emissions are direct GHG emissions from operations that are owned or controlled by the reporting company.
  • Scope 2 (GHG emissions): Scope 2 emissions are indirect GHG emissions from the generation of purchased or acquired electricity, steam, heat or cooling that is consumed by operations that are owned or controlled by the reporting company.
  • Scope 3 (GHG emissions): Scope 3 emissions are all other indirect GHG emissions (not included in Scope 2 emissions) that occur in the reporting company’s value chain. For BHP, these are primarily emissions resulting from our customers using and processing the commodities we sell, as well as upstream emissions associated with the extraction, production and transportation of the goods, services, fuels and energy we purchase for use at our operations; emissions resulting from the transportation and distribution of our products; and operational emissions (on an equity basis) from our non-operated joint ventures.
  • Target (for BHP with respect to GHG emissions): An intended outcome in relation to which we have identified one or more pathways for delivery of that outcome, subject to certain assumptions or conditions. 
     

Our approach and position

Our strategy to support reduction of GHG emissions in our value chain has three primary focus areas: 

  1. support the development and adoption of GHG emissions intensity reduction technologies in steelmaking 
  2. encourage direct suppliers to pursue net zero for their operational GHG emissions (direct suppliers’ Scopes 1 and 2 emissions) 
  3. support the development and adoption of GHG emission reduction technologies in shipping 

Our ability to support reductions in our reported Scope 3 emissions inventory 

Steelmaking

Potential steelmaking decarbonisation pathways

Our medium-term goal is to support industry to develop steel production technology capable of 30 per cent lower GHG emissions intensity relative to conventional blast furnace steelmaking, with widespread adoption expected post-CY2030.

We use our conceptual ‘steel decarbonisation framework’1 as a foresight tool for how ore-based steel production may evolve. It consists of process routes1 which, in our view, offer the greatest potential for developing into near zero emissions2 steelmaking with sufficient flexibility, scalability and efficiency to support widespread adoption.

Our strategy is to support the development of technologies across these process routes. As we have previously stated in Pathways towards steelmaking decarbonisation, decarbonising the existing blast furnace process route is key to medium-term decarbonisation in the steelmaking industry, as blast furnaces are widely used and there is a young blast furnace fleet in steelmaking regions, such as China and India.  Process routes must also be developed that can combine with low to zero GHG emissions3 hydrogen and with electric furnaces based on renewable or other low to zero GHG emissions3 power for long-term steelmaking decarbonisation. As outlined in our Climate Transition Action Plan 2024 (CTAP), BHP is technically and financially contributing to the development of technologies with the potential to reduce GHG emissions intensity by at least 30 per cent. While some technologies have demonstrated this potential, further commercial and technical maturity is required before they can be deployed at scale. We continue to work with customers, industry peers, research partners and government organisations to accelerate the development and adoption of these technologies in support of our long-term net zero Scope 3 GHG emissions goal.

In support of our goal, we participate in projects that demonstrate emissions-abatement opportunities at commercial scale, such as blast furnace abatement campaigns and Direct Reduced Iron (DRI) plant trials using BHP's Pilbara iron ores. We also participate in pre-commercial and pilot-scale trials in relevant operational environments to test the performance of particular components (e.g. performance of a commercialised carbon capture technology with blast furnace gas).

BHP considers modified blast furnace, DRI and electrochemical reduction to be the pathways most likely to be viable for widespread adoption due to their flexibility, scalability and efficiency. For each potential pathway, we have defined a set of activities that contribute to achieving our medium-term goal for steelmaking and support the potential for long-term commercialisation and widespread adoption of the technology in support of our long-term net zero Scope 3 GHG emissions goal. 

Footnotes

1. The ‘steel decarbonisation framework’ and its process routes can be found at Pathways towards steelmaking decarbonisation.
2. 0.40 tonnes of CO2-e per tonne of crude steel for 100 per cent ore-based production (no scrap), as defined by the International Energy Agency (IEA) and implemented in ResponsibleSteel International Standard V2.1.1 (‘near zero’ performance level 4 threshold). ResponsibleSteel (2024), Achieving Net Zero Heavy Industry Sectors in G7 Members, IEA, Paris, License: CC BY 4.0, which also describes the boundary for the emissions intensity calculation (including in relation to upstream emissions).
3. Lower GHG emission(s) (other than shipping fuels) capable of lower absolute GHG emissions or GHG emissions intensity than the current state or the conventional or incumbent technology, as applicable.  

 

Key demonstration projects contributing to BHP’s Scope 3 CY2030 goal for steelmaking

Footnotes

1. A steelmaking reductant feedstock and/or fuel source capable of lower CO2 emissions intensity than the use of steelmaking coal in the blast furnace process route (e.g. hydrogen, coke syngas, biomass and recycled fuels). The degree of emissions intensity reduction varies significantly by source.
2. Other potential steel plant emission sources that may be considered include integrated power stations, blast furnace stoves, sinter plant flue gas and coke plant flue gas subject to technical and economic feasibility. 
3. The blast furnace process route GHG emissions intensity ‘today’ value has been calculated using a baseline reference of 2.2 tonnes of CO2-e per tonne of crude steel, as sourced from IEA Iron and Steel Technology Roadmap (October 2020). 
4. 0.40 tonnes of CO2-e per tonne of crude steel for 100 per cent ore-based production (no scrap), as defined by the International Energy Agency (IEA) and implemented in ResponsibleSteel International Standard V2.0 (‘near zero’ performance level 4 threshold). IEA (2022), Achieving Net Zero Heavy Industry Sectors in G7 Members, IEA, Paris, License: CC BY 4.0, which also describes the boundary for the emissions intensity calculation (including in relation to upstream emissions).

Shipping

As one of the world’s largest dry bulk charterers, we can play a role in supporting the maritime industry to meet or exceed the GHG emission reduction ambitions set by the International Maritime Organisation (IMO). 

Our shipping medium-term goal, long-term net zero target and CY2030 commitment are generally consistent with or exceed the IMO’s ambitions. Our strategy, which encompasses efficiency improvements, the adoption of lower GHG emissions1 and low to zero GHG emissions2 alternative fuels, and enhanced carbon accounting practices, is designed to support our goals and drive actions that contribute to the global effort to reduce GHG emissions and promote more sustainable maritime operations. 

Our pathway will be accelerated directly by our actions and indirectly by the impact of our actions and influence on the industry. Our strategy to support our pathway encompasses three areas of focus: 

  1. Efficiency improvements: Drive operational efficiency through vessel and voyage optimisation and technological energy efficiency improvements. Operational efficiency measures include consolidating parcel sizes to use larger and more efficient vessels and using alternative routes. Technological measures include chartering vessels employing energy-saving technologies, such as vessels with premium hull coatings and wind-assisted propulsion systems, which we have trialled with Pan Pacific Copper and Norsepower. 
  2. Lower GHG emissions1 and low to zero GHG emissions2 alternative fuels: Establish demand and incentivise industry uptake of lower GHG emission fuels and low to zero GHG emissions fuels, such as our dual-fuelled LNG chartered vessels, biodiesel-fuelled voyages and methanol-fuelled voyages, respectively. We have also signed charter contracts for two ammonia dual-fuelled vessels (expected to be delivered from 2028) and are working across the ammonia value chain for the supply of low to zero GHG emissions ammonia. We continue to work with regulatory bodies, shipyards and other key stakeholders to address the challenges for use of ammonia onboard vessels as well as with participants across technical, commercial and supply assurance aspects for the supply of electrolytic ammonia, commonly referred to as ‘green ammonia’. 
  3. Enhance carbon accounting: Step-change improvements in the completeness and accuracy of our carbon accounting through digitisation and automation in our value chain. This builds on our partnership with DNV and our use of their Veracity data platform for validation and reporting of shipping-related value chain GHG emissions since FY2022. We continue to engage our supply chain partners to improve our Scope 3 GHG emissions data accuracy and completeness.

 

Footnotes

1. Capable of between 5 per cent to 80 per cent lower GHG emissions intensity (gCO2-e/joule) on a well-to-wake basis compared to conventional fossil fuels used in shipping. Well-to-wake basis is inclusive of the GHG emissions across the entire process of fuel production, delivery and use onboard vessels. 
2. Capable of between 81 per cent to 100 per cent lower GHG emissions intensity (gCO2-e/joule) on a well-to-wake basis compared to conventional fossil fuels used in shipping. Well-to-wake basis is inclusive of the GHG emissions across the entire process of fuel production, delivery and use onboard vessels. 

 

Direct suppliers

We engage with and encourage our direct suppliers to set their own operational GHG emissions targets or goals (for their Scopes 1 and 2 emissions) to align with our Scope 3 long-term target to achieve net zero by CY2050 for the operational GHG emissions of our direct suppliers. Our strategy targets the top 500 direct suppliers by spend and encompasses three areas of focus – selective purchasing, supportive engagements and measurement and monitoring. 

We also seek to improve our reported Scope 3, Category 1 emissions inventory accuracy and ability to reflect GHG emissions reduction initiatives being implemented by our direct suppliers by using supplier-specific emission factors where available.

Performance and disclosure

Information is valid at August 2026.

Our most recent climate-related disclosures (including performance data) can be found in the: